Cafe Hayek - Latest Comments in When Does Inequality Matter?

Re: When Does Inequality Matter?

liberty — Wed, 08 Mar 2006 17:56:22 -0000

>John Dewey: "Do you think we're also genetically programmed to eventually accept our place in life?"

>Maybe. Most revolutionaries are young, aren't they?

Or maybe people just grow up, learn that life is not a meal to be handed to you (by your parent, government or servant) but a garden you must tend and make a meal from....

The absolute idiocy of the Russian Revolution is testament to this: many of the revolutionaries were older, but the only ones who still believe the garbage they spew tend to be quite young or quite stoned.

The rest of us learn: http://www.tweller.com/mini...

Re: When Does Inequality Matter?

xteve — Wed, 08 Mar 2006 16:43:32 -0000

"I was a relatively poor student 35 years ago, and I did believe then that one's place in society was important. I envied the rich fraternity guys because I thought they attracted women with their sports cars and stylish clothes."

See? We are competing with the Jones's. We're competing for chicks. Chicks love status.

Re: When Does Inequality Matter?

Half Sigma — Wed, 08 Mar 2006 10:28:00 -0000

Well, I wrote a post about this at my blog, here is the link:

http://www.halfsigma.com/20...

But I forgot to write about religion and happiness.

Re: When Does Inequality Matter?

John Dewey — Wed, 08 Mar 2006 09:54:10 -0000

Half Sigma,

I will concede that a correlation exists between income and happiness, though I'm not sure which is the determinant. Please note that the Pew Research study you referenced listed the strongest happiness correlations as health, income, church attendance, and being married (companionship). Three of my four factors are in that list, and the Pew authors point out that health is the strongest predictor.

I've personally met many low-to-moderate income, religious married people. Their contentment makes it difficult for me to believe that income really matters. Income or wealth is certainly not a guarantee. My wife has an extremely wealthy, but sick and widowed aunt who would trade all her many millions to get back her health and her husband. She realizes now, in her 70's, how unimportant is the social status she enjoyed for four decades.

As the Pew Researchers point out, they could not obtain an adequate sample of the very rich. So neither they nor we can use their study to make conclusions about the happiness of the truly wealthy.

Re: When Does Inequality Matter?

the Radical — Wed, 08 Mar 2006 09:30:32 -0000

"if you are poor, you get screwed in many ways. If your kid gets charged for having a few grams of dope..."

Is this a problem of inequality or of bad politicians making shitty laws?

Re: When Does Inequality Matter?

the Radical — Wed, 08 Mar 2006 09:26:15 -0000

Half Sigma,

Interesting how you note that few conclusions can be drawn from the Pew study and them go on to say that it somehow shows that your theory of status is correct. While I will agree that status is important for many i think that reducing happiness to a struggle for status is very empty fails to fully explain human motivation. People with very high status are not always happy and people with low status sometimes are.

You should probably write another post and take into account John Dewey's call for a more dynamic theory of happiness, the truth will be better served in this manner.

Re: When Does Inequality Matter?

liberty — Wed, 08 Mar 2006 09:16:47 -0000

>What I consider adequately feeding my children, being healthy, and dressing warm in the winter is very different from what those things would mean to someone in a developing country today or someone in the US 80 years ago.

But my point was that 80 years ago people did use such a measure- because then it was objective. Could they survive? Did they die of something obviously related to absulte poverty - eg starvaton, malnutrition, a closely related disease, etc.

Today, we use realtive measures because 0% of us die of objectively poverty related causes.

But still, many people are happy and contented about their situation because they know that these objective measures are fulfilled. The rest are petty and jealous and I couldn't care less whether their measures are satisfied. Many people are racist too - it doesn't mean we should pander to that, neither should we pander to petty jealousy of others' wealth.

Re: When Does Inequality Matter?

Bill — Wed, 08 Mar 2006 09:14:16 -0000

Inequality is a big concern, and it should be. Of course we shouldn't try to make sure that everyone gets a million dollars at birth and an equally attractive spouse. Come on, if you are poor, you get screwed in many ways. If your kid gets charged for having a few grams of dope, you can't hire the private attorney to file the suppression motions and discovery requests that makes the D.A. drop the charge to an ordinance violation. If you are poor you are more likely to live in an area with more crime, meaning you or your kids stand a greater chance of being shot. Now, granted, your chance of survival is much better than the chance of dying of the plaque or by a Viking had you been poor in 600 A.D., but it still is something to be pissed about. Also, not having the same access to hot chicks as rich frat guys can be irritating. It just isn't "fair," not that life should be fair. Anyway, its a big deal.

Re: When Does Inequality Matter?

liberty — Wed, 08 Mar 2006 09:12:48 -0000

Since I mentioned opportunity and this choice of opportunity vs. equality has come up, I will link to an post about it that I wrote:

http://www.myarsefrommyelbo...

Re: When Does Inequality Matter?

Half Sigma — Wed, 08 Mar 2006 08:49:58 -0000

Rising income relative to others in society brings happiness. Rising income relative to some point in the past does not. There was a research study.

I wrote a blog post about this, here is the link:

http://www.halfsigma.com/20...

I think I may need to write another blog post.

Re: When Does Inequality Matter?

Wild Pegasus — Wed, 08 Mar 2006 08:36:53 -0000

Mike,

Yes, actually. I'm answering the question: economic inequality is important because it generally serves as a proxy for political inequality. When people say, "Oh man, markets are doing well for [x]!" and [x] has wildly disparate incomes, we need to look more closely at [x]'s political structure.

- Josh

Re: When Does Inequality Matter?

John P. — Wed, 08 Mar 2006 08:33:03 -0000

Liberty said, "How about whether you can feed your children, everyone is healthy, you can all dress warm in the winter and each child can grow up and provide the same for all his family?"

Each of these standards (and the others Liberty mentioned in his/her comment) has no real meaning without a context for comparison. What I consider adequately feeding my children, being healthy, and dressing warm in the winter is very different from what those things would mean to someone in a developing country today or someone in the US 80 years ago.

As I indicated at the beginning, I don't think that such relative differences are things that government should seek to erase (or perpetuate). My point is just that "doing well, period" cannot be divorced from some type of comparison.

Re: When Does Inequality Matter?

liberty — Wed, 08 Mar 2006 08:06:16 -0000

>People routinely move from small towns to big cities. Why? I suspect that the overwhelming reason is to enjoy the absolutely greater material standard of living that cities offer.

Or rather, I think, the vast myriad of opportunities. My standard of living has been higher since moving to the country, because housing and land are so much cheaper - but one needs a job to be able to enjoy this increased standard.

>But those are all still *relative* measures. You determine that you are doing well by comparing your state to some other state. There's no independent measure for determining whether you are doing well.

How about whether you can feed your children, everyone is healthy, you can all dress warm in the winter and each child can grow up and provide the same for all his family? You might respond that people should have education and a chance at choice of employment rather than being stuck in dead-end work that their parents did - but even all of that is objective not relative. If my father or neighbor didn't have an education or choice of work, I supposedly would be happy without it too; the objective standard can be set high as well. All poverty definitions used to be of this absolute sort - until nearly every single person surpassed them and then both absolute and relative poverty measures were raised much higher and the relative quoted the most. Most Americans are happier to see their children do well than they are to see them surpass their neighbor's children.

>"Based on the fact that the majority of Americans carry a high amount of credit card debt, it would seem you are in the minority, the acquisition of material goods seems to be the primary motivator."

Or perhaps people just don't want to worry about money - both wanting to earn a high income and using credit cards can be seen as indicators that people don't even want to think about money - they just want to spend as is necessary as they go about doing what really matters - being with family, going on fun family vacations, enjoying life! If they happen to rack up debt or if it means working toward a higher income in order to retire well and spend the whole rest of your life with your loved ones without worry, then that is what it takes. Just because you use your credit cards to buy electronics doesn't mean that everyone is materialistic - nor does watching football on Sundays have lesser moral value than taking a stroll in the park or going out to dinner.

>Massive economic inequality is important because it serves as a proxy for massive political inequality

In days of Emperors this was true. Today, as you might notice, many politicians come from backgrounds of little wealth - just as most of the richest 500 in the country came from little wealth originally too. So, if people used to see inequality as non-democratic, they should recognize what century and country they live in today.

I don't buy that genetics or human nature or rationality is behind the distaste for inequality - I think its purely jealousy and a yearning for the ideals underlying socialism. The American dream does not require and cannot coexist with the socialist flattening out of incomes.

Re: When Does Inequality Matter?

gump — Wed, 08 Mar 2006 07:53:35 -0000

the Radical,

You ask me to cite a source, and I provided you with on. I am not going to cite every article on this subject on this matter (this was the most recent I read). Gary Becker has done other work relating to this subject, if you are interested. Also, I am not really a psychologist (or even a bioligist), and I suspect neither are you (that's why you should read the article).

Nevertheless, I'll try to respond to your comment. The author's point is that in our prehistoric environment early man had to be constantly vigilint and being overly optimistic could make us vulnerable to attack. Evolution is about

passing down traits that enhance our survival. So a trait, such as being overly optimistic, probably did not get passed on. (so it is possible that early man could have gotten too happy to be eaten) Most people (especially economists) think we should maximize our happiness. Part of doing this is exploring that underpinnings of such emotions. Homo spaiens are not always happy. Modern pyschology tries trace the origins of such behavioral trends, and, personally, I think it's an important to explore whether there is an eolutionary basis to such emotions.

Re: When Does Inequality Matter?

the Radical — Wed, 08 Mar 2006 06:52:54 -0000

Don,

To answer the question on this thread simply; inequality matters when the person making a claim about the supposed negative effects of inequality stand to gain financially, materially, politically or gain in terms of some smug sense of satisfaction that the "anointed" derive from beating those dirty capitalists.

So basically inequality, for any practical or real purposes, doesn't matter.

Re: When Does Inequality Matter?

the Radical — Wed, 08 Mar 2006 06:46:50 -0000

gump,

Don't believe everything you read. There are far more places where there are men than where there are tigers. Also, the watering hole was only one aspect of man's life even in pre-civilizational times. Even if the tiger example held this is not sufficient evidence to say that happiness was some kind of burden. More than one cancer survivor will tell you that happiness and a positive outlook most certantly increases man's chance of survival. Even if being too happy lowers ones chance of survival this by no means indicates some "genetic predisposition" toward misery.

If man needs modern psychology to fight his genes then how did archaic man get happy enough to get eaten?

Re: When Does Inequality Matter?

Mike — Wed, 08 Mar 2006 05:55:33 -0000

Isn't the case that your belief in, "Massive economic inequality is important because it serves as a proxy for massive political inequality" should lead you not to eliminate economic inequalities as it seems this discussion is about, but rather about how to eliminate political inequalities? Get the money out of politics. Eliminate artificial electoral lines. Revisit Article 1 Section 8 of the US Constitution. Etc. However, even the founders of our nation were largely from the wealthy elite, so I am not sure there will ever be a case where a political outcome doesn't closely mirror an economic outcome. And if that is in fact true, then those with less economic and political power ought to hope that the power of governments, and hence the wealthy, are substantially curtailed from what they are today.

Re: When Does Inequality Matter?

John Dewey — Wed, 08 Mar 2006 05:19:56 -0000

"Based on the fact that the majority of Americans carry a high amount of credit card debt, it would seem you are in the minority, the acquisition of material goods seems to be the primary motivator."

Half sigma,

Your first argument was that humans are "genetically programmed" to seek a higher place in society. Now you are saying that acquisition of material goods is the prime motivator for U.S. citizens. I disagree with the first but not the second.

The fact that humans seek happiness through material possessions does not prove anything about either happiness or genetics. I hope you discover before you get too much older that I am right about the importance of companionship, health, intellectual challenge, and spiritual growth.

Re: When Does Inequality Matter?

John P. — Wed, 08 Mar 2006 04:33:18 -0000

Slocum wrote: "Not a all--a person can also compare how he is doing to how he was doing 10 or 20 years ago. Or how his parents were doing when he was a child. People can feel they are doing well, if things are getting better over time."

But those are all still *relative* measures. You determine that you are doing well by comparing your state to some other state. There's no independant measure for determining whether you are doing well.

Re: When Does Inequality Matter?

gump — Wed, 08 Mar 2006 03:33:51 -0000

to "the Radical":

There was an article in Men's Health's (I think two issues ago) that said (and I don't have a perfect memory) something along the lines that if early man was too happy at the water hole it meant getting eaten by a tiger. I remember the author using that to assert that being too happy didn't improve early man's chances of survival. He went on to say that modern pyschology has advanced so that we know how to circumvent this possible genetic predisposition (or fighting the genes).

Re: When Does Inequality Matter?

Slocum — Wed, 08 Mar 2006 02:20:07 -0000

"While relative performance does not necessarily indicate things that need to be remedied, it is nevertheless the only way for anyone to determine whether he is 'doing well, period.'"

Not a all--a person can also compare how he is doing to how he was doing 10 or 20 years ago. Or how his parents were doing when he was a child. People can feel they are doing well, if things are getting better over time.

Re: When Does Inequality Matter?

Charlie Q — Tue, 07 Mar 2006 20:28:19 -0000

"To do well, period, people need a good footing, not an equal footing. No one needs to win, so no one needs a fair chance to win."

Haven't yet read the essay, but from the excerpt, I think Schmidtz is being slippery with his (ahem) race metaphor. Very few competitors actually expect to win a race, or even to be given a front row spot at the starting line. But they do expect fairness.

Equality and fairness are not necessarily the same, but Schmidtz uses them interchangeably. An equal chance (identical, evenly balanced) may be neither necessary nor practical. But a fair (reasonable, impartial) start for all is a worthy social goal.

And who gets to define a "good" footing? It's not kids born into poverty and living in broken families in broken down school districts. Usually, it's fellows like Schmidtz in the nice loafers telling the barefoot kids what's good enough for them.

Re: When Does Inequality Matter?

PJGoober — Tue, 07 Mar 2006 19:59:48 -0000

[I said that massive economic inequality is a good proxy for political inequality. And it is.]

You are correct, but It's also worth noting that economic inequality is a good proxy for cognitive inequality to some extent on average (In other words, for the average person, the set of people that make more money than them average a higher IQ than them). This leads to the political inequality being more likely to be deserved(again, on average, not in every case).

Re: When Does Inequality Matter?

Chris — Tue, 07 Mar 2006 19:42:31 -0000

"Let's face the reality of human nature that people DO care about their place in society and they DO care about what the top 1% or doing, and nothing is going to change that."

Lots of things we thought were basic human nature to care about turned out not to be so. In the 1950s, white southerners firmly believed it was better for the races to be segregated. That didn't make it natural, or moral, or a decent basis for public policy. Nor is it, in my opinion, moral to base policy preferences on what is greed for what your neighbor has.

Now, don't misunderstand me, I'm not saying that redistribution is equal to segregation or some such. But what I am saying is that the leap from "well, that's what people preferences are" to public policy programs is a stretch. Maybe people's preferences OUGHT to be disregarded.

Re: When Does Inequality Matter?

the Radical — Tue, 07 Mar 2006 18:50:27 -0000

"The most important thing to the vast majority of people is their place in society...This is basic human nature."

If something is human nature it would by definition be participated in by ALL members of society, unless some members of society are not humans.

"Based on the fact that the majority of Americans carry a high amount of credit card debt, it would seem you are in the minority, the acquisition of material goods seems to be the primary motivator."

Based on the fact that the many Americans are not happy, and many people with very little consider themselves happy, it would seem as though this doesn't mean much. It is a pretty big jump to take average CC debt figures and try to explain human happiness.